Craddick files bills to help community hospitals

Published 4:00 pm, Tuesday, January 25, 2011

The Martin County Hospital will be among those that have an easier time finding funds for equipment purchases in the future if a bill filed by Rep. Tom Craddick is approved.

Filed in the House this week, the bill would give public hospitals the ability to borrow money from banking institutions instead of having to finance purchases through bonds or agreements with vendors.

"This gives us the opportunity to go to a local bank and not strap ourselves with high interest," said Paul McKinney at Martin County Hospital.

The issue is not always one that comes up at larger hospitals but can cause problems for rural hospitals that need new equipment, but aren't spending enough to approach voters with a bond issue.

Craddick's bill would give publicly owned hospitals -- whether run through a municipality, county, hospital district or other entity -- the authority to take out loans from a bank for up to five years. The banks, in turn, only would be permitted to provide loans under the same interest caps that apply to other hospital operations.

Any funds borrowed then would be paid back through hospital revenue not already dedicated to pay off bonds or cover operating costs.

"Other than general obligation revenue bonds, most public hospitals have no authority to borrow money," Craddick said, in a statement. "While bonds are an effective way to purchase larger brick and mortar items, these bonds are an expensive and complicated way to purchase capital items and invest in smaller projects."

McKinney said most rural hospitals like theirs have small operating budgets without room for the purchase of new technology and supplies.

"We can pay for it in cash and leave ourselves pretty strapped or finance it from the vendor (where) the interest rates are horrible," McKinney said.

If this bill is approved, they'd be able to introduce new technology when needed without necessarily having to save up for it first.

"I see the potential that it's going to help us a lot," he said.

Martin County passed a $22 million bond last year to finance the construction of a new hospital. McKinney said completion of the facility is set for the summer of 2012 and will bring 62,000 square feet of space for the county's doctors and other services.

Presently, the hospital has about 12,000 square feet and its health clinic, home health program, physical therapy and other services are run from separate buildings.

The bill also was meant to provide relief to Lamesa's Medical Arts Hospital, according to Craddick.

"Rural hospitals like Martin County Hospital and Lamesa Medical Arts Hospital need to be able to borrow funds from a bank for smaller purchases to ensure that they have the best technology and equipment available for patient care," Craddick said, in a statement.